TGF-beta-1 is a potent inhibitor of hepatocyte growth both in vivo and in vitro. In this study we analyzed the effects of TGF-beta-1 on both naturally occurring and diethylnitrosamine-induced hepatocarcinogenesis using single transgenic TGF-beta-1 and double transgenic c-myc/TGF-beta- 1 mice in which the expression of both transgenes was targeted to the liver. Hepatocellular tumors developed spontaneously in 59% (10 or 17) of the TGF-beta-1 mice by 16-18 months of age. Coexpression of TGF-beta- 1 and c-myc transgenes in the liver accelerated hepatic tumor growth in both the presence and absence of carcinogenic treatment. Moreover, diethylnitrosamine-initiated tumors in the c-myc/TGF-beta-1 mice showed a high rate of malignant conversion associated with a reduced expression or lack of TGF-beta receptor type II. The results suggest that overexpression of TGF-beta-1 may contribute to liver carcinogenesis and that loss of TGF-beta receptor type II transduced inhibitory growth signals and up-regulation of c-myc are critical steps in liver tumor progression.